As Gawain looks around the area he believes is the Green Chapel, he hears a whirring, grinding noise—the sound of an axe being sharpened. He calls out, and the Green Knight himself walks out of the cavern, carrying his mighty axe, and states that he will claim what Gawain has pledged to give him..

Gawain tells him to take only one stroke, then bows his head. The Green Knight raises his axe to strike the blow, but checks himself when he sees that Gawain flinches each time he lifts the axe. He reminds Gawain that when he was struck a year ago that he did not flinch, even though the blow took off his head. Gawain swears not to move and awaits the blow.

The Green Knight brings the axe down and lightly cuts Gawain on the neck, drawing a small amount of blood. Seeing his blood in the snow, Gawain gets up and draws his sword, warning the knight that if he attacks after having given the blow, Gawain will be forced to battle him. The Green Knight then amicably explains the situation: he and his wife have been testing Gawain the whole time. The Green knight is Lord Bertilak, and the old crone in the castle was none other than Morgan le Fay, a sorceress who learned her magic from Merlin, the wizard. Her magics allowed the Green Knight to survive the blow at Camelot, as she wanted to challenge the court and frighten Guinevere.He remarks that while Gawain did well resisting temptation three times, he still took the sash without notifying the lord, which was a dishonorable act. This is why he checked Gawain twice with the axe and lightly struck him with the third. The Green Knight allows Gawain to keep the sash and invites him back to Hautdesert Castle to celebrate New Year’s Eve. Gawain politely declines, deciding instead to return home. 

Upon return to Camelot,Gawain wears the green sash covering up his scar as a token of his shortcomings. He is warmly received by those who interpret it as an honor or renown instead, inspiring other knights also wear bands of bright green in remembrance of Gawain’s adventure.